German Parliament approves gas storage levy amendment in key vote

The German Parliament -- the Bundestag -- voted Dec. 20 to approve a draft law that would abolish the country's gas storage levy on cross-border flows from Jan. 1.

The draft law was the first item on the parliamentary agenda for Dec. 20 at 0900 local time (08:00 GMT) with changes to the German Energy Industry Act (EnWG section 35e) approved in a second and third reading.

The law now passes to the Bundesrat -- Germany's upper parliament -- for final approval, expected later Dec. 20.

Germany pledged in May to scrap the controversial neutrality charge for cross-border points from January 2025 following widespread condemnation of the charge and its impact on the European gas market.

However, there were concerns that the necessary legislation may not be passed before the end of year after the collapse of the ruling German coalition in November.

The German government said that, under the draft law, the legal basis for collecting the gas storage levy would be changed so that, from Jan. 1, 2025, the charge would only be levied on domestic gas.

"Border crossing points and virtual coupling points, via which gas exported abroad have previously been included in the gas storage levy, will no longer be charged with the gas storage levy in the future," it said.

It said this would dispel European Commission doubts regarding the charge and make it easier for EU member states that rely on gas transit through Germany to diversify their supply routes to move away from Russian gas.

Austrian concerns

Germany introduced the neutrality charge in late 2022 to offset the high costs it incurred from strategic gas storage filling in the summer and autumn of that year.

The charge added to the cost for countries -- especially those in Central and Eastern Europe -- that take gas via Germany, including imports of LNG from the US and pipeline gas from Norway.

It also made Russian gas imports more competitive as these volumes could reach markets such as Austria, Slovakia and the Czech Republic without passing through Germany.

On Dec. 16, Austria's energy minister Leonore Gewessler urged Berlin to pass the law, with Vienna set to continue to pressure Germany on the issue.

"The German neutrality charge is a burden on our path to ending our dependence on Russian gas," Gewessler wrote on X, formerly known as Twitter.

"It increases the cost of gas imports via Germany to Austria and thus our diversification: more than Eur60 million [$63 million] in additional costs have now been incurred," she said.

"If the removal of the tax is further delayed, Austria has the option of taking legal action before the European Court of Justice. We are preparing for this."

The dispute comes as European gas prices remain relatively high. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Dec. 19 at Eur43.01/MWh.